Thursday, March 19, 2009

Why Trials

This is from a March 4th post on Slate by my friend Jesse Eisinger. It's well worth reading for a concise take on the budget, the bailout and the media. Here's a quote on how to manage the bailout:

"We need to rip that weak spine out of the rotting corpse of our regulatory bodies, show it to them, a la Mortal Kombat, and then transplant a new, real spine into them. The SEC has been culturally inclined to allow bad actors to pay fines, often nominal ones, and reach settlements where they neither admit nor deny guilt. That has to end!

After their spinal surgery, they will need to go after big-wig wrongdoers and take them to trial. If we let the view that sees this as one giant bubble in which everyone acted more or less with equal irrationaity triumph, all will be lost. What I mean is that we jeopardize the chance for genuine structural change. Wall Street won't always be this weak politically. (Even at its weakest point, it's still extraordinarily influential, as I point out above.) If the public is allowed to see public trials in which top Wall Street executives are proved to have broken laws, they will be more eager, not less so, for sweeping financial regulatory reform."

It's not a witch hunt I want, it's accountability and change and if it takes trials, so be it. Remember this big idea? Yes we can.